Willingness To Pay: What's in a Name?

Author: Gafni A.  

Publisher: Adis International

ISSN: 1170-7690

Source: PharmacoEconomics, Vol.14, Iss.5, 1998-11, pp. : 465-470

Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.

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Abstract

Despite renewed enthusiasm for the use of willingness to pay (WTP) in healthcare applications, there are still a lot of objections, resentment and scepticism regarding the desirability and feasibility of this technique. Objections can be classified into different categories: e.g. theoretical, feasibility of measurement, misunderstanding of economic concepts and emotional. In this commentary, I have tried to explain the nature of the ‘emotional’ objections to the use of WTP. I argue that such objections are not helpful and distract attention from the proper scientific debates about the important topics of theoretical foundation for economic evaluations and feasibility of measurement of individuals' WTP. I believe that some of the emotional objections to WTP stem from perceptions about the relationship between the WTP measure and actual payment for health services. Hence, I discuss the use of the WTP methodology in 2 distinct contexts - cost-benefit analysis (CBA) and market research. Understanding the difference between these 2 most common areas of use will help alleviate objections based on emotions, allow us to use the technique where there seems to be no objections to its use (i.e. market research) and concentrate on the scientific debate where objections exist (i.e. the case of CBA).